Video Game Marketing: The New Bible Part 1

Branded IP, Game Sequels Winning: Of the top 10 selling games in March, only one (Homefront) was based on a new IP. No secret there: Shoppers tend to go with what they know, and are spending money on trusted and proven quantities – e.g. the well-known games they're certain will deliver high-quality experiences, or that they know friends are also playing, ensuring hours of multiplayer fun and more bang for the buck. Publishers are therefore increasingly shying away from innovation and sticking with the trusted brands, franchises and familiar concepts that they believe will ensure predictable and steady returns on investment. This presents a fundamental problem for small shops or more cash-constrained studios: How does your latest creation compete with more well-known and beloved properties and/or you can't afford the up-front licensing fees or revenue splits needed to secure these deals?

Fewer, But Bigger Titles Having More Impact: Following on the above bullet points, we're seeing greater activity around bigger, more blockbuster games such as Red Dead Redemption or Call of Duty: Black Ops. These marquee releases are starting to become so overwhelmingly powerful at retail that they're actually acting as black holes – sucking in and crushing any competition in their surrounding release orbit. Worse for rivals, games such as COD: Black Ops aren't just being purchased less for what's in the box than not (e.g. online multiplayer components) and constantly being refreshed, so that they never collect dust on the shelf (thereby prompting the need for new games to fill the void, as in the past). With 2.6 million players logging 5.9 multiplayer hours on launch day alone, they're clearly cannibalising time and money that would, in previous years, have been spent buying other products. Also worth nothing: As free to play web based titles such as 3D outing Battlestar Galactica Online (which clocked one million users in just six weeks) become deeper and more technically advanced, expect them to present a growing threat as well.

Convenience Winning Over Size and Scale: How much game is enough? Developers struggle to continue to "rightsize" titles, delivering just enough features to justify the price and please consumers. We're not only seeing this design and business strategy reflected in the launch of social network and smartphone games such as FarmVille and Trade Nations, which continue to steadily roll out regular updates, expansions and iterations faster than traditional gaming titles. We're also seeing the rise of web games like Everybody Edits, a Flash title which went from a minute side-project to growing $10,000/month concern through steady, constant expansion. But the real issue isn't whether or not hybrid titles like MX vs. ATV Alive can succeed by offering a base game at a lower ($40) retail price, then upcharging for content on the back-end, as would a typical online microtransaction-based outing. It's whether, if shoppers have 30 minutes to kill and are in the mood for an online fantasy role-player, it truly matters if they scratch the itch by playing World of Warcraft, on their PC or a less sophisticated iPhone and iPad MMO outing like Order & Chaos Online. In other words – if the key variables are simply "X amount of time" and "in the mood for a medieval dungeon crawl," do shoppers really care how big, beautiful and grandiose the game world is? Or would they be equally satisfied with something cheaper, more convenient, similarly thematically styled and just as enjoyable in its own right that equally satisfies the urge?

Players Have Endless Choice: Digital aisles burst with free and impulse buys, making it harder to justify a full-price launch, and necessitating that game makers increasingly look towards alternate business models to monetise, e.g. subscription fees, virtual goods purchases or upselling users microtransactions on the back-end. But even more troubling is how these trends affect consumer loyalty: If you're paying zero, or next to nothing for a game, what's to stop you from moving on to a competing product? It's well-known that Zynga spends millions in advertising each month managing user churn. And if 67 different Facebook games all promise to allow you to build the city or café of your dreams, and none cost a penny up-front, why not skim or idly browse half a dozen? Note that's before you even ponder the impact of used games, regular add-ons and expansions, and mobile/social/online games that can change at a moment's notice as developers quickly update and iterate them to optimise returns based on analytics and player feedback. Translation: There's no shortage of titles, or competition, to pick from.

Super users pay many times more than what you'd expect for a boxed or monthly subscription game while casual consumers become more fickle and fragmented.

Play Habits Are Changing: On the bright side for traditional game developers and publishers, core gamers are spending as much, if not more time with AAA blockbuster titles as ever. You can clearly see this reflected in the rise of so-called "whales," or super users who pay many times more than what you'd expect for a boxed purchased or monthly subscription in online games such as The Lord of the Rings Online. But at the same time, we're also seeing casual consumers become more fickle, and fragment across devices, platforms and play styles, making these users harder to capture. They may squeeze in a few minutes of Angry Birds on the bus to work, play a little Millionaire City between filing TPS reports and then sit down to enjoy half an hour with Portal 2 before packing it in for the day. Also of note, and deeper foreshadowing: Nearly half of Facebook's 600 million users play Zynga games monthly, and titles like CityVille are attracting 100 million players in just 43 days, making them among the fastest-growing, most successful games ever. Consider what this means to your audience moving forward: We're raising an entire generation that will come to think of FrontierVille as a "strategy game," view Restaurant City as a "simulation," and consider Ravenwood Fair their definition of an "RPG." Think about what this means to your future fan base, and the need to design games with core depth, yet casual accessibility – you know what they say about first impressions. We're already seeing these shifts in thinking reflected on the charts: As of April, just one market leader – Electronic Arts – was a recognisable name from the traditional gaming space.

Fans Are More Informed Than Ever: Thanks to user reviews, online websites, social networks and general word-of-mouth, which nowadays travels at the speed of tweet or Facebook update, there's no pulling the wool over shoppers' eyes anymore. If your game is bad, they'll know in minutes. If you slip up and treat fans poorly, online forums can be ablaze without warning. If a rival developer or publisher decides they want to release a competing game in the same general vicinity, they can quickly do it, and steal your thunder. Knowing this, to stay competitive today, you have only one real option when it comes to marketing: Excite, engage and empower end users, as word-of-mouth is everything in the new social economy.

No Room for Average Anymore: Finally, if you look at what's happening on the game development and publishing spectrum, you'll see much is happening at the poles. At the bottom end of the scale, zero- or low-cost outings such as apps, free-to-play online games and web browser based titles are exploding in popularity. At the high end, smash hit AAA releases are gobbling up the lion's share of dollars, and forcing boxed product to go ultra-premium, pairing first-rate solo experiences with a wealth of value-adds including ongoing downloads, expansions and multiplayer options. Everything in between is getting crushed. Think you can ship a nondescript product for $60 and hope to go platinum? Guess again.

Where does the future of gaming lie? Write in with your questions for games industry analyst Scott Steinberg. Select queries will appear in his next column.